Compare Investments By Property Type

Each type of real estate investment has pluses and minuses. The most important question to determine which investment might be best for you is to review the circumstances and decide what type of investment would meet your needs and desires.

The categories are based on how likely there is to be a short-term issue with the price/earnings a property can produce, ability to remain liquid (be able to feel comfortable that an asset can be sold without having to wait,) how long it takes to sell, how often the investment has to be reviewed, how much it costs to invest and how easy it is to convert the asset to other uses.

	Multi-Family	Retail	Office	Industrial	Hospitality	Land
Short-term Volatility	Low	Low	Low	Low	Low	Low
Liquidity	Low	High	High	High	High	Low
Transaction Timing	Low	High	High	High	High	High
Day-to-day Management/Monitoring	High	Low	Low	Low	High	Low
Minimum Investment	Low	High	High	High	High	High
Ease of Diversification	High	Low	High	High	Low	High

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Multifamily properties don’t display short-term volatility due to the constant need for housing even in a down economy, they DON’T have high abilities to quickly produce cash and/or be turned into cash, take a long time to be bought or sold, can easily be monitored, require a relatively low investment and are easy to diversify.

Retail properties don’t have short-term volatility because they are covered by long-term leases, can’t quickly be sold, don’t require daily monitoring, have a high investment requirements and are not easily diversified

Office buildings have longer leases, can’ be sold relatively, don’t require daily monitoring, do have a high minimum investment and are easily diversified

Industrial Buildings are not subject to short-term volatility because of longer leases, are highly liquid and have strong transaction capability, don’t require daily management, the minimum investment is high and ease of diversification is high.

Hospitality Properties have low short-term volatility, high liquidity, transaction timing and needs for day-to-day monitoring and low capability for diversification

Land low short-term volatility, high liquidity and transaction timing, low need for daily monitoring and high minimum investment and possibility for diversification